In the UK, limited businesses have to pay corporation tax on the money they make. What, though, is a company tax? When is it due? How much is it? When do you have to pay it? All of these things will be talked about in this blog.
What is Corporation Tax?
Ltd. companies in the UK have to pay this tax. It’s like income tax, but it’s only for businesses that don’t get a personal budget. That means that when your new business starts making money, it has to pay a 19% company tax, even if it wasn’t losing money before.
If your business is a limited company, you have to pay this tax on the money you make from trading, selling assets, investments, charged assets, and other things.
How to Register for Corporation Tax?
Once you have set up your limited company, you need to register it with HMRC so that you can pay corporation tax on it. You can also sign up online. You need to register your business within three months of starting to do business. Trade includes things like buying and selling, renting out a house, posting ads, hiring people, and so on.
If you don’t file your corporation tax on time, you might have to pay a fine. So put it at the top of your list.
What are the Rates of Corporation Tax?
Right now, a company’s profit is taxed at a rate of 19%. It was 20% at the beginning of 2016–17. This rate is based on how much money your business makes. The government has promised to keep the amount of corporation tax low.
Corporation Tax Rate for Limited Company:
The tax rate you pay depends on when your business closed for the year. You can find the accounting period on the website of the government. This tax generally matches up with the yearly books and financial statements of the business. Most businesses use a 12-month term for their accounting.
When is Corporation Tax Due?
It’s a tricky step because the due dates are different for this tax and depend on the accounting period:
You have to pay corporation tax before you can file your business’s tax report.
Nineteen months and one day have passed since the end of the last tax year.
Make tax reports for the business to find out how much corporation tax you owe. You have 12 months to file your business tax reports.
If a business makes more than £1.5 million, it will pay its corporation tax over time. You still need to tell HMRC if your business is losing money even if there is no corporation tax due.
How to Pay Corporation Tax?
When you know how much company tax you owe and when it’s due, you pay it. There are a few different ways to pay this tax:
It only takes a day or two to do online or phone banking.
The same day or the next, CHAPS works. It takes three business days for BACS to work.
This process takes three days.
Three days if you pay online with a debit card or a business credit card.
It takes three days for a bank or building society
It takes five days to set up direct debit for the first time.
Quick Sum Up:
What is a company tax? When is it due? What are its rates? How do I pay it? These are all important questions that we have answered.
